In Orange County, CA a VA (Veterans Administration) guaranteed home loan is the preferred loan program for active, non-active, Reserve, National Guard, and retired military of the armed forces. There are several reasons, including the fact that no down payment is required up to a $700,000 purchase price, and no private monthly mortgage insurance required.
Veterans and active duty military in Orange County are able to use a VA mortgage loan for purchasing a home, building a home, or refinancing an existing mortgage. And the existing mortgage does not need to be a VA loan. Many current Orange County homeowners are finding that being able to refinance out of a Conventional loan and into a VA loan at 100% loan to value is a great thing. And remember, no mortgage insurance, which FHA and Conventional loans will have.
We will discuss what role the VA plays in a VA guaranteed mortgage, the benefits of a VA home loan for Orange County Veterans and Active Duty personnel, who is eligible for a VA loan, and the documentation you will need to present to your Orange County VA direct lender in order to apply.
Did you know that more than 27 million veterans and service personnel are eligible for VA financing, yet many in Orange County aren’t aware it may be possible for them to buy homes again with VA financing using remaining or restored loan entitlement? The lack of realizing the benefits of a VA loan seems especially true for current homeowners who do not realize how high the Orange County VA loan limits currently are in 2011.
VA Does Not Offer Loans Directly to Orange County Veterans and Does Not Guaranty You Will Qualify
The VA does not actually lend the money to you directly. They offer a guaranty to a lender, in this case a local Orange County direct VA lender, that if you should default on the loan, they will pay the Orange County VA lender a percentage of the loan balance.
*The word GUARANTY does not actually guarantee the Orange County veteran will qualify for a VA home loan.
Primary Benefits of a VA Mortgage for Orange County Veterans:
- 100% financing, up to a $700,000 purchase price in Orange and Los Angeles counties.
- No monthly private mortgage insurance is required. (Conventional financing requires this at over 80% loan to value. FHA requires this on all loans.)
- There is a limitation on Orange County home buyers’ closing costs – costs are regulated by VA. Some costs cannot be paid by the Veteran.
- The loan is assumable, subject to VA approval of the assumer’s credit. This is an awesome feature.
- 30 year fixed loan. VA also offers a great 5 year program, but with interest rates so low its hard not to take advantage of a 30 year fixed.
- Seller can pay up to 4% of the Orange County veterans closing costs and even pay down they buyer’s debt to help lower their debt-to-income ratio.
- Interest rates are similar to FHA interest rates.
- You don’t need perfect credit. Typically, most Orange County VA lenders wants a minimum middle FICO score of at least 620. You can buy a home only two years after a foreclosure.
Frequently Asked Questions from Orange County Veterans about VA loans:
Q: My parent is a veteran. Can I obtain a VA loan if I have not served in the military myself?
No, the VA loan benefit does not extend to a veteran’s children.
Q: What is required to prove I served in the military?
You should have your DD214. Your lender will need this, along with a completed Request for Certificate of Eligibility. Your Orange County VA lender can help.
Q: My spouse who has passed away was an eligible veteran. Am I eligible for the home loan benefit myself?
A surviving spouse is eligible if they have not remarried, and the eligible veteran died during active duty service or as a result of a service-related disability.
Q: Is a VA loan better than a Conventional mortgage for Orange County homeowners and buyers?
In many cases, yes. VA guaranteed loans often offer a lower interest rate than conventional mortgages, especially for higher balance mortgages between $417,000 and $700,000, the Orange County 100% financing limit. Also, they do not require monthly private mortgage insurance when borrowing more than 80% of a home’s value, and they can be easier to get approved for because of the flexibility with credit and the allowance for higher debt to income ratios.
It varies depending on the current workload of your lender, but it is typically the same as for Conventional and FHA mortgages – 3 weeks to 45 days. Much depends on your ability to quickly deliver the items required for loan processing. But if you’ve already been PreApproved by a local Orange County Direct VA lender, then closing in 3 weeks is a possibility.
Of course the first step is always to talk with a Orange County VA loan expert who can provide customized loan scenarios based on your qualifications and goals.
Authored by Tim Storm, an Orange County, CA FHA and VA Loan Officer – Please contact my office at Home Point Financial for more information about an Orange County, CA home loan. 949-640-3102.
Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.
tstorm (at) ochomebuyerloans.com